Brokerage CLSA Sees China Bad Loan with $1 Trillion of Losses

According to an assessment by brokerage CLSA Ltd, Chinese banks’ bad loans are at least nine times bigger than official numbers indicate, which points to potential losses of more than $1 trillion.

“ The IMF said last month that the nation may have $1.3 trillion of risky loans, with potential losses equivalent to 7 percent of gross domestic product.”

~ Bloomberg

Potential losses could range from 6.9 trillion yuan ($1.1 trillion) to 9.1 trillion yuan, according to a report by brokerage. The estimates are based on public data on listed companies’ debt-servicing abilities and make assumptions about potential recovery rates for bad loans. The IMF said last month that the nation may have $1.3 trillion of risky loans, with potential losses equivalent to 7 percent of gross domestic product.

CLSA is Asia’s leading and longest-running independent brokerage and investment group. The company provides equity broking and execution services, corporate finance and asset management services to global corporate and institutional clients.

Renowned for service excellence, product innovation and award-winning market intelligence, CLSA has been an unconflicted provider of research, sales and trading since 1986. CLSA has built its reputation on its unrivalled equity research and economic analysis, which is consistently ranked the best in Asia. With exchange memberships in every developed market in Asia and the USA, together with a dedicated team of experienced sales traders, CLSA is committed to delivering the best execution.